The halving and the law of the last survivor will soon be remembered by miners. In ten months, their margins will melt by half.
Halving
Each block is currently fetching 6.25 BTC, or almost $200,000 at the current price. Anthony Power did the calculation for listed miners. It shows that the average gross margin is $12,000 (50%)
In this game, miners Cipher Mining, Riot and Terawulf are doing well with margins of 62%, 58% and 63% respectively.
Terawulf (5.5 PE/s) benefits from nuclear energy at $0.02 per kWh. Cipher Mining (6 p.e./s) enjoys electricity at $0.027.
However, the halving is approaching and these margins will soon be a thing of the past. Next May, the reward will be only 3,125 BTC. The cost of energy needed to mine bitcoin will double overnight.
Not to mention the unstoppable rise in hashrate. The latter has almost doubled in one year, which is already equivalent to a halving!
“Bitcoin network energy consumption remains at the same level, but at the same time the global hashrate has increased significantly”, declared Fred Thiel, CEO of Marathon, the largest North American miner.
Indeed, not a week goes by without a miner announcing the deployment of thousands of additional miners.
For example, Cleanspark intends to reach 16 PE/s before the end of the year. Riot, which already produces nearly 700 BTC per month, has just purchased 33,280 miners and is aiming for 20.1 EH/s by the end of 2024.
Survive through efficiency
Faced with the halving and the intensification of competition, another parameter becomes crucial: the efficiency of its fleet of miners and their purchase prices.
Overall, the efficiency of the global miner fleet is estimated at 40 watts per TH/s. And in this game, Marathon leads the race with an efficiency of 24 watts per TH/s.
That said, while higher efficiency is a definite advantage, you should still not buy your miners at a high price. Good timing can make all the difference.
See for example the miner StrongHold who bought 9,000 miners at the efficiency of 29.5 watts per TH/s at a price of $84 per TH/s in December 2021, when Bitcoin was breaking records.
Compare with Cleanspark, which was reinforced at the beginning of the year by 12,500 antminer XP with a higher efficiency of 21.5 watts at the much lower price of $23 per TH/s…
Miners with the most efficient fleets and the best electricity prices will be best placed to survive the halving. Especially those who, like Riot and Marathon, practice overclocking thanks to immersion cooling (+45% efficiency…).
It must be realized that the cost of North American miners to mine one BTC will increase from $12,000 on average to $24,000.
Knowing that these figures do not take into account operational costs such as administrative costs, salaries, travel, interest on loans, etc.
If the bitcoin price stagnates, some miners will have to relocate near cheaper sources of electricity. That is to say where it is in surplus and renewable, which is would be good news.
That said, all things being equal, the halving promises substantial bitcoin appreciation.
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